Bets are rising that Pakistan will default on its debt just as it starts to revive investor interest with a reduction in terrorist attacks.
Credit default swaps protecting the nation’s debt against non-payment for five years surged 56 basis points last week to 620 points amid the global market sell-off, according to data compiled by Bloomberg. That’s the highest since January 2015 and the steepest jump after Greece, Venezuela and Portugal among more than 50 sovereigns tracked by Bloomberg.
About 40 percent of Pakistan’s outstanding debt — both local and foreign — is due to mature in 2016, according to data compiled by Bloomberg. That’s roughly $45 billion, of which about 4.3 trillion rupees ($41 billion) is in local currency.
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